IKAR: GRAINS-Wheat falls for 2nd day, improved US weather outlook weighs

U.S. wheat lost more ground on Tuesday with the market trading near last session’s five-week low on pressure from weather forecasts predicting much-needed rains across the U.S. Plains. Corn ticked higher after sliding 1.5 percent on Monday in sympathy with wheat, while soybeans hit an eight-month high, rising for a third straight session.

Chicago Board of Trade most-active wheat contract had dropped 0.1 percent to $4.47 a bushel by 0240 GMT, not far from Monday’s five-week low of $4.46 a bushel. Soybeans gained as much as 0.3 percent to $9.31 a bushel, their highest since Aug. 12, and corn added 0.1 percent to $3.57-1/4 a bushel.

“Wheat and corn prices have dropped as forecasts show good rainfall for the U.S. Plains, helping to improve crop yields for the key wheat producing region,” ANZ said in a note to clients. The decline in wheat prices came despite a U.S. Department of Agriculture report showing a slight deterioration in the winter crop condition.

The agency, in a weekly report, said 56 percent of the U.S. wheat crop was rated good to excellent, down 3 percent from last week. Analysts surveyed by Reuters had expected the U.S. winter wheat condition ratings to remain unchanged at 59 percent good to excellent. Russian wheat export prices are expected to fall 4 percent from current levels when the new crop is delivered to the market, IKAR, one of the leading Moscow-based agriculture consultancies, said on Monday.

Russia is expected to harvest a crop of more than 100 million tonnes of grains for the third year in a row, adding to a global surplus and increasing pressure on already weak global prices. There was some support for the corn market as adverse weather impacts yields in Brazil.

Forecasts for a record winter corn crop in Brazil look overly optimistic after summer rains ended sooner than expected with the weakening of El Nino weather patterns, which could prolong the country’s recently aggressive imports of the grain.

The Agriculture Ministry’s Conab crop supply agency is expecting a record 57.1 million tonne winter corn harvest in the coming months, up from the 55.3 million tonnes last year.

Commodity funds bought an estimated net 11,000 CBOT soybean contracts on Monday, trade sources said. The funds were also net sellers of 10,000 corn contracts and 9,000 wheat contracts, traders said.

 Contract    Last    Change  Pct chg  Two-day chg  MA 30   RSI
 CBOT wheat  447.00  -0.25   -0.06%   -2.88%       465.38  31
 CBOT corn   357.25  0.50    +0.14%   -1.38%       362.52  41
 CBOT soy    930.50  2.25    +0.24%   +1.50%       899.12  74
 CBOT rice   9.84    -$0.01  -0.05%   -1.11%       $10.22  40
 WTI crude   40.32   -$0.04  -0.10%   +1.51%       $37.96  65
 Currencies                                                
 Euro/dlr    $1.141  $0.000  +0.01%   +0.07%               
 USD/AUD     0.7615  0.002   +0.28%   +0.86%

Wheat, corn and soy US cents/bushel. Rice: USD per hundredweight RSI 14, exponential